The shift lever on my Rebuilt A-4 appears to be a few inches taller than the one it replaced and it is hitting my exhaust elbow before it can travel into forward gear. Rather than reconfigure my exhaust pipe, I am considering shortening 2 inches off the top of the lever so it clears the pipe.

Is it OK to shorten the lever by a few inches? Will it cause vibrations or reduce the force applied by the shift linkage? Any other way to modify?

The tranny shaft needs a certain amount of angular rotation to go into fwd/rev properly. The longer the shift arm is, the lower the forces will be but the higher the amount of cable travel needed. The standard shift cable will only give you 4" of travel (if I remember correctly).
Someone must know the correct arm length to use the 4" of travel. Anyone? I admit I'm a bit embarrassed that I don't know..

The length of the lever doesn't matter as long as the attachment point remains the same distance from the transmission shifting shaft. They normally have two holes drilled through the lever, if you were and are using the second hole up, remove it from the engine and cut it off just above the holes. Hacksaw works just fine. Smooth the sharp edges with a file and touch up the paint.

If it is easier and still available, just swap the lever over from the old one.

Thanks for the responses. The engine, and original shaft have been returned, so too late to swap them. The shifter on my boat was always on the port side of the engine, which is also where my shift linkage is oriented.

From the responses, it seems OK to shave a little off the end of the shaft, as long as the attachment point for the linkage is not changed. Best to attach linkage and test that the linkage moves the shifter effectively before doing anything. If enough torque generated to go into reverse, just cut some from the shaft.

. . . . it seems OK to shave a little off the end of the shaft, as long as the attachment point for the linkage is not changed.

Exactly right. It's the attachment point that counts, everything beyond that is useless iron. Here's an old picture of mine, port side mount. If I wanted I could saw off everything above the hub with zero effect.